Major resistance- 20708 (5- day MA)
Nikkei recovered more than 700 points following the footsteps of Wall Street but appreciating yen is putting pressure on the index at higher levels. The stock market sell-off was mainly due to US-China trade war tension and the Yuan devaluation. The Chinese central bank has set its daily currency rate at 6.9996 per dollar slightly weaker than expected. It hits intraday low of 20373 and is currently trading around 20480.
USDJPY is trading weak after a minor recovery of 150 pips and any break below 105.50 will drag the pair to the next level till 104.60.
On the flipside, 19700 will be acting as major support and any violation below will drag the index down till 19245/18900.
The near term resistance is around 20708 and any break above will take the index till 20915 (7- day MA)/21195.
It is good to sell on rallies around 20710-730 with SL around 21000 for the TP of 20000.
